The £21 million revamp of its pig processing plant at the Woodhead Brothers site has been done with efficiency at its core, a notion which crops up time and again from the firm’s agricultural team.
Sourcing and processing about 30,000 pigs a week between Colne and its sister plant at Spalding, Lincolnshire, Morrisons continues to buy British wherever possible.
Andrew Loftus, head of agriculture at Morrisons, along with head of livestock procurement/external meat sales Joe Mannion, stressed the British pig industry was in a good place to prosper and provide it with the throughput it requires.
This was a sentiment backed up by recent Defra farm business income figures, which revealed profitability in the sector was up 90 per cent on specialist farms compared to 2012/2013.
With farmers confident about producing good numbers of pigs, Morrisons said the supply base was there for the expanded site.
Mr Mannion said: “Six years ago we were processing 6,000 pigs a week, but there has been quite a rapid growth which has coincided with our pledge to be 100 per cent British.”
Mr Loftus added: “The pig sector is relatively successful at the moment. The grain price is coming down and many farmers are reaping the benefits of efficiencies they have had to drive into their businesses.”
The notion of business efficiency, however, is one which might resonate within the wider corporate structure of Morrisons because, as has been well reported, it suffered a tough Christmas with sales back 5.6 per cent on the year.
And with discounters such as Aldi and Lidl taking market share from Morrisons and other supermarkets, does the Bradford-based retailer’s commitment to British meat remain undimmed as it fights for customers?
There was a feeling from the two men the major investment at Colne showed British provenance was still fundamental to the Morrisons offering.
And while Mr Loftus acknowledged the firm needed to open more convenience stores and develop a strong online presence, he said the battle for shoppers’ hearts and minds was a subtle one.
Mr Loftus said: “There is currently a conflict in values going on with the consumer. The will to buy British has never been higher but, on the other hand, value has really gone up the agenda.
“If you can deliver British meat at the same price as the discounted foreign meat, people will buy British every time.”
Mr Mannion believed the grip Morrisons had over the entire supply chain meant it could control the cost to consumers far more than other firms.
He said: “Because we are in control of the whole business, we can control value. We also have such a large business that we can balance the carcase and make sure we are making the most of the fifth quarter and exporting it to places such as Africa and Hong Kong.
“If we do not maximise value we will never be competitive.”
With the supermarket currently having an 11 per cent market share for grocery, it enjoys a 14.3 per cent share on pork and 13.4 per cent share on red meat overall, something Mr Loftus was quick to emphasise.
He said: “Our market share in general is under pressure but we continue to do well on the meat side of things. So why would the firm fix something that was not broken?”
Keen to source more pigs, Morrisons brings most in on contract with some floating supplies and uses the deadweight average pig price as the starting point when it comes to payment.
With 70 per cent of its pigs sourced from a 70-mile radius of Colne and many from the Driffield area, the site works well as a procurement hub for the region.
With about 150 farms supplying it and the biggest sending 2,500-3,000 pigs every week, the firm was confident the British pig industry was robust enough to keep supplying enough animals for the 400-an-hour kill lines.
The firm said the ideal weight for the pigs to be brought in was between 70kg and 90kg, with performance data, killing out percentages and even disease prevalence fed back to suppliers via Morrisons’ website.
Mr Loftus said this enabled producers to analyse the regularity with which their stock was hitting specification and allowed them to make any alterations to the rearing process in order to drive efficiencies and enhance margins.
If producers can hit more targets, it will be easier for the company to meet the demands of the buying public, he suggested. And with the battle between supermarkets intensifying all the time, you get the impression Morrisons wants to be as lean and efficient as possible in the fight for market share.
According to the Rabobank pork quarterly report, the price outlook for the global pork market for the first half of 2014 is steady.
In the EU, Rabobank expects a positive first half of 2014, with lower feed costs and continued elevated price levels supporting recovery after a tough 2013.
The firm added: “The main question will be how farmers globally will react to lower feed costs and the scale of industry expansion which will follow.
“In light of the margin pressure most farmers have endured in recent years, Rabobank expects global pork production growth to be measured and in line with demand."
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